Livent Announces Second Quarter 2019 Results
PHILADELPHIA, Aug. 6, 2019 /PRNewswire/ -- Livent Corporation (NYSE: LTHM) today reported results for the second quarter of 2019. Livent reported revenue of $114.0 million, an increase of 6 percent compared to the same quarter in 2018, and GAAP net income of $15.5 million. Second quarter 2019 Adjusted EBITDA and adjusted earnings per share were $28.0 million and 12 cents per diluted share, respectively. Revenue, Adjusted EBITDA and adjusted earnings per share were all in-line with the guidance ranges, with price/customer mix, volumes and costs all consistent with previously communicated expectations.
"We achieved higher revenues in the second quarter, with increased volumes partially offset by lower pricing," said Paul Graves, president and chief executive officer of Livent. "Our hydroxide network is now running at record levels of production and we continue to meet all key milestones necessary to deliver the first phase of the Argentina expansion by the end of 2020."
Q3 and 2019 Outlook( (1))
Livent expects third quarter 2019 revenue to be in a range of $105 million to $115 million, compared to $112 million in the same period in 2018. Third quarter 2019 Adjusted EBITDA and adjusted earnings per share are projected to be in a range of $26 million to $30 million and 11 cents to 14 cents per diluted share, respectively.
Livent maintains its full-year 2019 guidance, with revenue expected to be in a range of $435 million to $475 million, Adjusted EBITDA to be in a range of $125 million to $145 million and adjusted earnings per share to be in a range of 56 cents to 66 cents per diluted share.
"We expect total volumes available for sale to be higher in the second half of this year across all major products, most notably in hydroxide and carbonate. We also expect that increased production from Argentina will result in margin improvement," continued Graves. "The market for electric vehicles remains strong, with passenger EV sales up roughly 45% globally through the first half of this year, and up over 60% in the same period in China. Leading OEMs and battery producers are now providing greater clarity as they prepare for new vehicle launches beginning in 2020. Livent remains well-positioned to take advantage of continuing demand growth for lithium products."
The table below provides additional estimates for select financial items:
Full-Year 2019
· Interest expense
$1 - $2
million
· Adjusted tax rate
19 - 23
percent
· Full-year weighted average diluted
shares outstanding
~146.5
million
· Depreciation & Amortization
$22 - $26
million
· Adjusted cash from operations
$90 - $120
million
· Capital additions and other
investing activities
$210 - $240
million
Supplemental Information
Livent has posted supplemental information on the web at www.livent.com, including reconciliations of non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP.
About Livent
For more than six decades, Livent has partnered with its customers to safely and sustainably use lithium to power the world. Livent is one of only a small number of companies with the capability, reputation, and know-how to produce high-quality finished lithium compounds that are helping meet the growing demand for lithium. The company has one of the broadest product portfolios in the industry, powering demand for green energy, modern mobility, the mobile economy, and specialized innovations, including light alloys and lubricants. Livent employs approximately 800 people throughout the world and operates manufacturing sites in the United States, England, India, China and Argentina. For more information, visit Livent.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this presentation are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including a decline in the growth in demand for electric vehicles; adverse global economic conditions; the success of our research and development efforts; volatility in the price for performance lithium compounds; risks relating to our planned production expansion and related capital expenditures; reduced customer demand, or delays in growth of customer demand, for higher performance lithium compounds, the potential development and adoption of battery technologies that do not rely on performance lithium compounds as an input; risks inherent in international operations and sales, including political, financial and operational risks specific to Argentina, China and other countries where we have active operations; customer concentration and the possible loss of, or significant reduction in orders from, large customers; failure to satisfy customer quality standards; fluctuations in the price of energy and certain raw materials; failure to achieve the expected benefits of our separation from FMC as well as the other factors described under the caption entitled "Risk Factors" in our 2018 Form 10-K filed with the Securities and Exchange Commission on February 28, 2019 and first quarter 2019 Form 10-Q filed with the Securities and Exchange Commission on May 8, 2019. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this presentation to conform our prior statements to actual results or revised expectations.
1. Although we provide forecasts for adjusted earnings per share, Adjusted
EBITDA and adjusted cash from operations, we are not able to forecast the
most directly comparable measures calculated and presented in accordance
with GAAP. Certain elements of the composition of the GAAP amounts are
not predictable, making it impractical for us to forecast such GAAP
measures or to reconcile corresponding non-GAAP financial measures to
such GAAP measures without unreasonable efforts. For the same reason, we
are unable to address the probable significance of the unavailable
information. Such elements include, but are not limited to,
restructuring, transaction related charges, and related cash activity.
As a result, no GAAP outlook is provided.
Media contact: Juan Carlos Cruz +1.215.299.6170
juan.carlos.cruz@livent.com
Investor contact: Daniel Rosen +1.215.299.6208
daniel.rosen@livent.com
LIVENT CORPORATION
---
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
---
(Unaudited, in millions, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
---
Revenue $
114.0 $
107.9 $
212.3 $
210.7
Costs of sales 80.2 54.1 145.8 104.7
Gross margin 33.8 53.8 66.5 106.0
Selling, general and administrative expenses 9.8 4.4 19.0 8.0
Corporate allocations - 5.0 10.1
Research and development expenses 0.8 1.0 1.6 2.0
Restructuring and other charges 3.8 0.2 3.9 2.3
Separation-related costs 1.3 2.9
Total costs and expenses 95.9 64.7 $
173.2 $
127.1
Income from operations before non-operating pension benefit 18.1 43.2 39.1 83.6
and settlement charges and income taxes
Non-operating pension benefit and settlement charges - 0.2
Income from operations before income taxes 18.1 43.2 39.1 83.4
Provision for income taxes 2.6 5.2 6.7 13.2
Net income $
15.5 $
38.0 $
32.4 $
70.2
Weighted average common shares outstanding - basic (1) 146.0 123.0 146.0 123.0
Net income per weighted average share - basic $
0.11 $
0.31 $
0.22 $
0.57
Weighted average common shares outstanding - diluted (1) 146.5 123.0 146.5 123.0
Net income per weighted average share - diluted $
0.11 $
0.31 $
0.22 $
0.57
____________________
(1) For the prior periods presented, the weighted
average shares outstanding for both basic
and diluted earnings per share was
calculated, in accordance with ASC 260,
Earnings Per Share, using 123.0 million
shares of common stock outstanding, which
was the number of shares issued to FMC in
part in exchange for the asset contribution
by FMC to us. Weighted average shares
outstanding for the prior periods excludes
the 23.0 million shares of common stock
subsequently issued as part of the public
offering and over-allotment option
exercise.
LIVENT CORPORATION
---
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
---
RECONCILIATION OF NET INCOME (GAAP) TO ADJUSTED EBITDA (NON-GAAP)
(Unaudited)
The table below provides a reconciliation of Net income to Adjusted EBITDA.
Three Months Ended June 30, Six Months Ended June 30,
(In Millions) 2019 2018 2019 2018
---
Net income (GAAP) $
15.5 $
38.0 $
32.4 $
70.2
Add back:
Provision for income taxes 2.6 5.2 6.7 13.2
Depreciation and amortization 4.8 4.3 9.7 8.6
EBITDA (Non-GAAP) (1) $
22.9 $
47.5 $
48.8 $
92.0
Add back:
Restructuring and other charges (a) 3.8 0.2 3.9 2.3
Non-operating pension benefit and settlement charges (b) - 0.2
Separation-related costs (c) 1.3 2.9
Adjusted EBITDA (Non-GAAP) (1) $
28.0 $
47.7 $
55.6 $
94.5
___________________
(1) In addition to net income, as determined
in accordance with U.S. GAAP, we evaluate
operating performance using certain non-
GAAP measures such as EBITDA, which we
define as net income plus interest
expense, net, income tax expense
(benefit), depreciation, and
amortization, and Adjusted EBITDA, which
we define as EBITDA adjusted for
restructuring and other charges (income),
non-operating pension expense (benefit)
and settlement charges, and separation-
related costs. Management believes the
use of these non-GAAP measures allows
management and investors to compare more
easily the financial performance of its
underlying business from period to
period. The non-GAAP information
provided may not be comparable to similar
measures disclosed by other companies
because of differing methods used by
other companies in calculating EBITDA and
Adjusted EBITDA. This measure should not
be considered as a substitute for net
income or other measures of performance
or liquidity reported in accordance with
U.S. GAAP. The above table reconciles
EBITDA and Adjusted EBITDA from net
income.
(a) We continually perform strategic reviews
and assess the return on our business.
This sometimes results in management
changes or in a plan to restructure the
operations of our business. As part of
these restructuring plans, demolition
costs and write-downs of long-lived
assets may occur.
(b) Our non-operating pension expense
(benefit) and settlement charges are
defined as those costs (benefits) related
to interest, expected return on plan
assets, amortized actuarial gains and
losses and the impacts of any plan
curtailments or settlements. These are
excluded from our results and are
primarily related to changes in pension
plan assets and liabilities which are
tied to financial market performance and
we consider these costs to be outside our
operational performance. We continue to
include the service cost and amortization
of prior service cost in our Adjusted
EBITDA results noted above. These
elements reflect operating costs to our
businesses for the employment benefits
provided to active employees.
(c) Represents legal, professional,
transaction related fees and other
separation related activity.
RECONCILIATION OF NET INCOME (GAAP) TO
ADJUSTED AFTER-TAX EARNINGS (NON-GAAP)
(Unaudited)
(In Millions, Except Per Share Data) Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
---
Net income (GAAP) $
15.5 $
38.0 $
32.4 $
70.2
Corporate special charges:
Restructuring and other charges (a) 3.8 0.2 3.9 2.3
Non-operating pension benefit and settlement charges (b) - 0.2
Separation-related costs (c) 1.3 2.9
Income tax benefit on Corporate special charges (d) (1.1) (1.5)
Tax adjustment (e) (1.7) (5.1) (1.8) (5.8)
Adjusted after-tax earnings (Non-GAAP) (1) (2) $
17.8 $
33.1 $
35.9 $
66.9
Diluted earnings per common share (GAAP) $
0.11 $
0.31 $
0.22 $
0.57
Adjustment from GAAP to Non-GAAP average number of shares - (0.05) (0.09)
outstanding (2)
Corporate special charges per diluted share, before tax:
Restructuring and other charges, per diluted share 0.03 0.03 0.02
Separation-related costs per diluted share 0.01 0.02
Income tax expense (benefit) on Corporate special charges (income), (0.01) (0.01)
per diluted share
Tax adjustments per diluted share (0.02) (0.03) (0.01) (0.04)
Diluted adjusted after-tax earnings per share (Non-GAAP)
(1) $
0.12 $
0.23 $
0.25 $
0.46
Adjusted average number of shares outstanding used in diluted 146.5 146.5 146.5 146.5
adjusted after-tax earnings per share computations (Non-GAAP) (2)
___________________
(1) The company believes that the Non-GAAP
financial measures "Adjusted after-tax
earnings" and "Diluted adjusted after-
tax earnings per share" provide useful
information about the company's operating
results to management, investors and
securities analysts. Adjusted after-tax
earnings excludes the effects of
corporate special charges and tax-
related adjustments. The company also
believes that excluding the effects of
these items from operating results allows
management and investors to compare more
easily the financial performance of its
underlying business from period to
period. As a result, diluted adjusted
after-tax earnings is calculated using
an adjusted average common shares
outstanding (Non-GAAP). Refer to note 2
below for further information.
(2) The weighted average common shares
outstanding (GAAP) for both basic and
diluted earnings per share for the three
and six months ended June 30, 2018 on the
condensed combined statements of
operations was calculated, in accordance
with ASC 260, Earnings Per Share, using
123.0 million shares of common stock
outstanding, which reflects the number of
shares held by FMC prior to the IPO. This
results in both basic and diluted
earnings per share (GAAP) of $0.31 and
$0.57 for the three and six months ended
June 30, 2018, respectively. The weighted
average common shares outstanding (GAAP)
for both basic and diluted earnings per
share for the three and six months ended
June 30, 2019 was calculated using 146.5
million shares of common stock
outstanding, resulting in both basic and
diluted earnings per share (GAAP) of
$0.11 and $0.22, respectively.
Assuming adjusted weighted average shares
outstanding of 146.5 million, which was
the total number of weighted shares
outstanding as of June 30, 2019, adjusted
after-tax earnings per share would be
$0.12 and $0.25 for the three and six
months ended June 30, 2019, respectively
and $0.23 and $0.46 for the three and six
months ended June 30, 2018, respectively.
(a) We continually perform strategic reviews
and assess the return on our business.
This sometimes results in management
changes or in a plan to restructure the
operations of our business. As part of
these restructuring plans, demolition
costs and write-downs of long-lived
assets may occur.
(b) Our non-operating pension expense
(benefit) and settlement charges are
defined as those costs (benefits) related
to interest, expected return on plan
assets, amortized actuarial gains and
losses and the impacts of any plan
curtailments or settlements. These are
excluded from our results and are
primarily related to changes in pension
plan assets and liabilities which are
tied to financial market performance and
we consider these costs to be outside our
operational performance. We continue to
include the service cost and amortization
of prior service cost in our Adjusted
EBITDA results. These elements reflect
the operating costs to our businesses for
the employment benefits provided to
active employees.
(c) Represents legal, professional,
transaction related fees and other
separation related activity.
(d) The income tax expense (benefit) on
Corporate special charges (income) is
determined using the applicable rates in
the taxing jurisdictions in which the
corporate special charge or income
occurred and includes both current and
deferred income tax expense (benefit)
based on the nature of the non-GAAP
performance measure.
(e) The company excludes the GAAP tax
provision, including discrete items, from
the non-GAAP measure of income, and
instead includes a non-GAAP tax
provision based upon the projected annual
non-GAAP effective tax rate. The GAAP
tax provision includes certain discrete
tax items including, but not limited to:
income tax expenses or benefits that are
not related to operating results in the
current year; tax adjustments associated
with fluctuations in foreign currency
remeasurement of certain foreign
operations; certain changes in estimates
of tax matters related to prior fiscal
years; certain changes in the
realizability of deferred tax assets and
related interim accounting impacts; and
changes in tax law. Management believes
excluding these discrete tax items
assists investors and securities analysts
in understanding the tax provision and
the effective tax rate related to
operating results thereby providing
investors with useful supplemental
information about the company's
operational performance.
Three Months Ended June 30, Six Months Ended June 30,
(In Millions) 2019 2018 2019 2018
Tax adjustments:
Revisions to our tax liabilities due to finalization of prior year tax returns $
(0.7) $
(0.6) $
(1.2) $
(0.9)
Foreign currency remeasurement and other discrete items (1.0) (4.5) (0.6) (4.9)
Total tax adjustments $
(1.7) $
(5.1) $
(1.8) $
(5.8)
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) TO
ADJUSTED CASH FROM OPERATIONS (NON-GAAP)
(Unaudited)
Six Months Ended June 30,
(In Millions) 2019 2018
---
Cash required by
operating
activities (GAAP) $
41.3 $
18.0
Restructuring and
other charges 1.9 0.6
Separation-related
activities (1) 24.0
Adjusted cash from
operations (Non-
GAAP) (2) $
67.2 $
18.6
___________________
(1) Represents reimbursement to FMC for 2018
income taxes and transaction related
costs, pursuant to the Tax Matters
Agreement, for which we accrued
liabilities at December 31, 2018. Also
includes Separation-related costs.
(2) The company believes that the non-GAAP
financial measure "Adjusted cash from
operations" provides useful information
about the company's cash flows to
investors and securities analysts.
Adjusted cash from operations excludes
the effects of transaction-related cash
flows. The company also believes that
excluding the effects of these items from
cash provided by operating activities
allows management and investors to
compare more easily the cash flows from
period to period.
RECONCILIATION OF LONG-TERM DEBT (GAAP) AND CASH AND CASH EQUIVALENTS (GAAP) TO
NET DEBT (NON-GAAP)
(Unaudited)
(In Millions) June 30, 2019 December 31, 2018
---
Long-term debt (GAAP) (1) $
59.1 $
34.0
Less: Cash and cash equivalents (GAAP) (20.3) (28.3)
Net debt (Non-GAAP) (2) $
38.8 $
5.7
___________________
(1) As of June 30, 2019 and December 31, 2018,
the Company had no debt maturing within
one year.
(2) The company believes that the non-GAAP
financial measure "Net debt" provides
useful information about the company's
cash flows and liquidity to investors and
securities analysts.
LIVENT CORPORATION
---
CONDENSED CONSOLIDATED BALANCE SHEETS
---
(Unaudited)
(In Millions) June 30, 2019 December 31, 2018
---
Cash and cash equivalents $
20.3 $
28.3
Trade receivables, net of allowance of $0.1 in 2019 and $0.1 in 2018 118.0 141.4
Inventories, net 67.5 71.8
Prepaid and other current assets 53.5 59.8
Total current assets 259.3 301.3
Property, plant and equipment, net 337.3 275.7
Right of use assets - operating leases, net 16.5
Deferred income taxes 7.4 3.0
Other assets 89.2 80.0
Total assets $
709.7 $
660.0
Accounts payable, trade and other $
67.8 $
72.0
Accrued and other current liabilities 22.7 46.8
Income taxes 0.6 1.6
Total current liabilities 91.1 120.4
Long-term debt, less current portion 59.1 34.0
Operating lease liabilities - long-term 14.8
Long-term liabilities 21.1 17.7
Total equity 523.6 487.9
Total liabilities and equity $
709.7 $
660.0
LIVENT CORPORATION
---
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
---
(Unaudited)
Six Months Ended June 30,
(In Millions) 2019 2018
---
Cash provided by
operating
activities $
41.3 $
18.0
Cash required by
investing
activities (74.2) (26.8)
Cash provided by
financing
activities 25.0 9.1
Effect of exchange
rate changes on
cash (0.1)
(Decrease)
increase in cash
and cash
equivalents (8.0) 0.3
Cash and cash
equivalents,
beginning of year 28.3 1.2
Cash and cash
equivalents, end
of period $
20.3 $
1.5
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SOURCE Livent Corporation
